Make Your House payments on time, and Still go into Foreclosure

That article is garbage. Rather than try to actually explore WHY the home is being foreclosed on, it decides to play the emotion game. We are left to assume that the home is being foreclosed because the lender/servicer has confirmed that his application was fraudulent. A bumbling high school journalist would have confirmed the reason. I have no choice but to believe that the writer purposely left it out blame could be lifted from the home owner.

It appears that the home owner and his mortgage broker both committed fraud by submitting an application with a fake business severely over state the income.
IF the owner truly didn't know that these things were on his application, then he's a moron.

Those "details" are on the very first couple pages of the app., and not easily missed withing the "small type" of the many disclosures that follow.
Either way, it is his responsibility to know what is on his application.

Here's why I believe it is very unlikely that he didn't know about the inflated income or fake business. In order to claim you're a business owner, you have to document the business. He either helped facilitate this false documentation (which is typical) or he had one of the most corrupt brokers around; someone who was willing to merely take the application, and change everything, and invent all the fradulent documents until the loan would work. All this while not saying a word to his client, and then shielding everything from a sadly naive client who only signed w/o reading a word. Possible, but very unlikely.

The broker needs to go to jail btw. Stated loans aren't supposed to work that way, but we know what reality is. It is a shame, because far too many small business owners truly need that type of loan because of the way their tax returns look when applying for a loan via the conforming full documentation method.
A lot of people who make a good living, a living that can support a mortgage, are SOL because of these fraudulent brokers.

 

Stated loans are still being done today. I believe they will be done (at least for the most part) at the end of the month though.

It really is a shame.
My neighbors are in a hurry refinancing right now. They own three small businesses. Make a very nice living. The kind of living most people would love to have. However, they need a stated loan in order to refinance because they write off everything(very good accountant), and their tax returns won't support their modest mortgage.


Do I hear another good reason to implement the Fair Tax?
I never gave this angle much thought before now, but that's a definite plus for the FT.